Specific information about the state of second messengers in drug signaling pathways is key to understanding the mechanism of a drug within the cell. The largest class of drug targets is the G-Protein Coupled Receptor (GPCR) and over 40% of all prescription pharmaceuticals target a GPCR. These proteins are the focus of many drug discovery programs because they are therapeutic targets in a variety of areas including cancer, cardiac disease, diabetes, central nervous system disorders, inflammation, and pain. A critical component of many GPCR signaling pathways is the second messenger, diacylglycerol (DAG), however, there is no commercially available, robust assay for DAG that can be used in either drug screening or basic research applications. The challenge addressed by this proposal is to produce genetically-encoded robust and easy-to-use live cell assay products that can be used to study and to screen for GPCR activation. Phase I of this project demonstrated that it is feasible to produce extremely robust, genetically encoded, fluorescent sensors for DAG. This discovery is significant because despite their great advantages, the impact of genetically encoded assays on drug discovery has been limited because of poor signal to noise and low dynamic range of the response. In Phase II, the prototype sensors developed in Phase 1 will be optimized and packaged for delivery into living cells. These live cell assays will be validated under rigorous high throughput screening conditions to establish suitability for high throughput and in-vivo screening applications.